Mich. Admin. Code R. 125.2003 - Means to assure completion of optional improvements

Rule 1003. An optional improvement for resident use or convenience which has not been completed, shall not be advertised unless the completion of the optional improvement is assured by substantial completion or the advertising discloses the promised date of completion, or both. If an optional improvement is not completed by the date promised, then the department may, after notice of opportunity for hearing, require an irrevocable bank letter of credit, bond, or similar undertaking that is acceptable to the department posted with a public authority or may require adequate reserves established and maintained in a trust or escrow account to ensure completion of the optional improvement. In determining adequacy of the account, the department shall be guided by the facts and circumstances of each individual case, but the account shall be in compliance with all of the following provisions:

(a) Funds shall be kept and maintained in a separate escrow account.

(b) The account shall be approved by the department and shall be established in a financial institution doing business in this state or in another state whose laws require the account to be maintained in that state.

(c) Monthly progress reports shall be furnished to the department by the community for a new project for the first 6 months and, in the department's discretion, quarterly or semiannually after the first 6 months.

(d) The trust or escrow agreement shall state that its purpose is to protect the resident or prospective resident if the community fails to complete the construction of promised optional improvements. The trust or escrow agreement also shall authorize the department to inspect the records of the trustee relating the agreement.

Notes

Mich. Admin. Code R. 125.2003

1979 AC; 1998 AACS; 2003 AACS